Navigant Research Blog

Energy Efficiency Becoming a Resource Force

Brett Feldman — March 9, 2017

Energy efficiency used to be a fun little side show in the energy industry, a feel good story about shutting off lights and wearing more sweaters. This is no longer the case, as the size of utility and government-run energy efficiency programs have grown and program energy savings rival the production of large power plants. Electricity usage growth historically mirrored GDP trends, but these are no longer connected because usage has stagnated in many parts of the world while GDP expands.

Additionally, a new report issued February 16 by the Appliance Standards Awareness Project and the American Council for an Energy-Efficient Economy (ACEEE) claimed that the average American household saved nearly $500 on utility bills in 2015 due to state and federal energy efficiency standards for appliances, lighting, and plumbing products. Average household savings by state ranged from 11% to 27% of total consumer utility bills, with a national average of 16%. Total business utility bill savings from standards reached nearly $23 billion in 2015. Business savings equaled 8% of total spending on electricity and natural gas.

A Navigant Research report, Market Data: Global Energy Efficiency Spending, highlights these trends and others on a global basis. Such funding is expected to grow from $25.6 billion in 2017 to $56.1 billion in 2026. Europe and North America have fostered these types of programs for decades, while other regions and countries, particularly China, are expected to significantly increase energy efficiency investments in the future due to economic, technical, and environmental drivers.

As energy efficiency spending and savings expand, utilities and solutions providers will have to adjust their business models to find new ways to profit and create value for consumers or they will risk being left in the cold.